formulas

Question 1

Revenue

Answer 1

Selling price x Number of units sold

Question 2

Total Costs

Answer 2

Fixed costs + Variable costs

Question 3

Variable costs (Total variable costs)

Answer 3

Variable cost per unit x Number of units sold

Question 4

Profit

Answer 4

Total Revenue - Total Costs

OR

Total contribution - Fixed Costs

Question 5

Market Capitalisation of a business

Answer 5

Number of issued shares x current share price

Question 6

Expected Value of a decision with two possible outcomes A or B

Answer 6

[Pay off of A x probability of A] + [Pay off of B x probability of B]

Question 7

Net Gain

Answer 7

Expected Value - initial cost of decision

Question 8

Market Growth (%)

Answer 8

Change on the size of the market over a period / Original size of the market x100

Question 9

Market Share (%)

Answer 9

Sales of one product OR brand OR business / Total sales in the market x 100

Question 10

Added Value

Answer 10

Sales Revenue - Cost of the bought in goods and services

Question 11

Labour Productivity

Answer 11

Output over a time period / Number of Enployees

Question 12

Unit Costs (average costs)

Answer 12

Total Costs / Number of Units of Output

Question 13

Capacity Utilisation (%)

Answer 13

Actual Output / Maximum Possible Output x 100

Question 14

Return On Investment (%)

Answer 14

Profit from the Investment / Cost of the Investment

Question 15

Gross Profit

Answer 15

Revenue - Cost of sales

Question 16

Profit From Operations

Answer 16

Operating profit = Gross profit - Operating expenses

Question 17

Profit for year

Answer 17

Operating profit + Profit from other Activities - Net Finance Costs - Tax

Question 18

Gross Profit Margin (%)

Answer 18

Gross Profit / Revenue x100

Question 19

Profit from operations margin (%)

Answer 19

Operating profit / Revenue x 100

Question 20

Profit for Year margin (%)

Answer 20

Profit for year / Revenue x 100

Question 21

Variance

Answer 21

Budgeted figure - actual figure

Question 22

Contribution per unit

Answer 22

Selling Price - Variable costs per unit

Question 23

Total Contribution

Answer 23

Contribution per Unit x Units Sold

OR

Total Revenue - Total Variable Costs

Question 24

Break-Even output

Answer 24

Fixed Costs / Contribution per Unit

Question 25

Margin Of Safety

Answer 25

Actual level of output - Break-even level of output

Question 26

Labour Turnover (%)

Answer 26

Number of staff leaving / Number of Staff Employed by the Business x 100

Question 27

Employee Retention Rate (%) for a Particular time period

Answer 27

Number of Employees who remained with the Business for the whole period of time / Number of Employees at start of the time period x 100

Question 28

Employee Costs as percentage of turnover

Answer 28

Employee Costs / Turnover x 100

Question 29

Labour Costs per unit

Answer 29

Labour Costs / Units of output

Question 30

Return on Capital Employed (ROCE)(%)

Answer 30

Operating profit / Total Equity + non-current liabilities x 100

where total equity + non-current liabilities= capital employed

Question 31

Current Ratio

Answer 31

Current assets / Current Liabilities

Question 32

Gearing (%)

Answer 32

Non-current liabilities / Total equity + non-current liabilities x100

where total equity + non current liabilities = capital employed

Question 33

Payables days

Answer 33

Payables / Cost of Sales x 365

Question 34

Receivables Days

Answer 34

Receivables / Revenue x365

Question 35

Inventory turnover

Answer 35

Cost of Sales / Average inventories held

Question 36

Average Rate of return (%)

Answer 36

Average annual return / Initial cost of project x100